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The pension system of Kazakhstan to transfer to three financing sources

by March 10, 2017 World Sports

Minister recalled that the state pays a solidarity pension since 1998, basic since 2005. All the employed citizens transfer 10% of their wages to the accumulative pension fund since 1998. All this remains unchanged. New – henceforth the employer will be included in the pension system. He will contribute 5% of the wages of his employee.

The transition to a system with three funding sources is planned to be implemented in 2020. World practice shows that a multi-level pension system is more stable and allows to receive adequate amounts of pensions.

Also, T.Duissenko reminded that it is planned to further increase pensions paid from the state budget in the next years. From July 1, 2017, both solidarity and basic pensions will be increased by 20% compared to 2016. Basic pensions, disability benefits, and loss of bread-winner will be increased by 16% from January 1, 2018. From July 1, 2018, the methodology of the basic pension will be changed: now the basic pension will be paid depending on the length of participation of citizens in the pension system. This will affect more than 3 million people.

“This provides for additional expenditures from the state budget. About 300 billion tenge is already provided for in the budget. We expect that the average pension will be increased by 45% from July 1, 2018 compared to 2016, ” Minister commented.

The ideology of targeted social assistance will be completely changed: targeting is strengthened, TSA is paid instead of three benefits, which is much higher, and the poverty line will be increased from 40 to 50% of the subsistence level. This measure will also increase the size of TSA. About 7,000 families participated in this program and 90% of 8,000 able-bodied members of these families were employed last year.

Transformations in the system of special social services began in 2009. We can say that the market of special social services is completely demonopolized for today.

“If earlier services were provided only by state boarding schools, more than 100 NGOs provide special social services to 6,000 citizens for today. If we did not demonopolize the market, we would have to build 60 boarding houses, isolating these people from our family, “explained T. Duissenova.

In conclusion, Minister noted that the department plans to create small-size houses on the ground. The positive experience is already there – “Balapan” program. Houses of small capacity can be created within the framework of PPP. Further, it is planned to disaggregate boarding main goal of all these transformations is the provision of social services where the person lives.

Source: The Prime Minister of Kazakhstan